United States General Accounting Office General Government Division

Washington, D.C. 20548

Page 1 GAO/GGD-99-181R Answers to Hearing Questions on Quality Management

B-283613

September 10, 1999

The Honorable George V. Voinovich, Chairman

Subcommittee on Oversight of Government Management,

 Restructuring, and the District of Columbia

Committee on Governmental Affairs

United States Senate

Subject: Managing for Results: Answers to Hearing Questions on Quality Management

Dear Mr. Chairman:

This letter responds to your request for information following your July 29th hearing on quality

management. The enclosure contains our responses to questions we received from your

Subcommittee dated August 23, 1999.

Our responses are based primarily on our previously issued work on management reform,

and we therefore did not obtain agency comments on a draft of this letter. We are sending

copies of this letter to Senator Richard J. Durbin, Ranking Minority Member, Subcommittee

on Oversight of Government Management, Restructuring, and the District of Columbia,

Senate Committee on Governmental Affairs. We will make copies available to others upon

request. If you have any questions concerning this letter, please contact me at (202) 512-8676.

Sincerely yours,

J. Christopher Mihm

Associate Director, Federal Management

 and Workforce Issues
Enclosure

Responses to Subcommittee Questions

Following July 29, 1999, Quality Management

Hearing

Page 2 GAO/GGD-99-181R Answers to Hearing Questions on Quality Management

1. Should a vigorous quality management program be implemented

governmentwide in addition to the strategic planning framework

mandated by the Results Act?

We have not done work to specifically identify whether a governmentwide

quality management program, separate from the statutory and

management initiatives already under way, is needed. However, our work

concerning high-performing organizations provides useful insight. First, as

noted in our statement for the hearing, leaders in successful organizations

integrate the implementation of separate organizational improvement

efforts.1

 Regardless of whether these reforms are self-initiated, such as

Total Quality Management (TQM), or mandated by legislation, such as the

Results Act, agency top leadership needs to meld these various reforms

into a coherent, unified effort.

Second, high-performing organizations understand and can articulate how

their day-to-day performance contributes to results and improved

customer satisfaction--a key tenet of quality management. Consequently,

any effort to improve governmentwide performance also needs to pay

attention to the day-to-day processes and strategies that agencies employ

to achieve mission-related results. Effective implementation of the Results

Act requires such attention. Our work that looks at agencies’ fiscal year

2000 performance plans has shown that agencies need to improve how

their human capital and management resources and strategies are linked

to achieving mission-related results.2

 Understanding and then articulating

how these resources and strategies can best be mobilized to produce

results is crucial if agencies are to improve their performance.

The fiscal year 1999 program performance reports, due to Congress by

March 31, 2000, under the Results Act, will provide valuable evidence

concerning the degree to which agencies have considered and understand

how their processes and strategies lead to results. Each agency, in its

report, is to compare the agency’s actual performance against the goals

established in its annual performance plan. In cases where a goal has not

been met, the agency is to explain why and discuss the plans and

schedules for achieving the established performance goals. Agencies that

lack a clear understanding of the relationships among the agency’s

 

1

 Management Reform: Using the Results Act and Quality Management to Improve Federal

Performance (GAO/T-GGD-99-151, July 29, 1999).

2

 Managing for Results: Opportunities for Continued Improvements in Agencies’ Performance Plans

(GAO/GGD/AIMD-99-215, July 20, 1999).
Enclosure

Responses to Subcommittee Questions Following July 29, 1999,

Quality Management Hearing 

Page 3 GAO/GGD-99-181R Answers to Hearing Questions on Quality Management

resources, processes, products and services, and results will not likely be

in a position to successfully meet this requirement.

2. Does the Office of Management and Budget (OMB) have the

necessary resources and institutional knowledge to implement a

quality management initiative?

While we have not examined this issue directly, we would note that in 1990

OMB’s governmentwide TQM leadership functions and its staffing devoted

to TQM were moved into the Federal Quality Institute (FQI), which at the

time was part of the Office of Personnel Management (OPM). As a result,

there are serious questions about whether OMB would have the

institutional knowledge and resources needed to implement a quality

management initiative.

The degree to which OMB provides management initiatives with the

necessary resources and commitment has been a perennial question, and

we have found that the effectiveness of OMB’s leadership with regard to

management issues has been uneven. OMB’s challenge is to carry out its

central management leadership responsibilities in a manner that leverages

the opportunities of the budget process, while at the same time ensuring

that management issues receive appropriate attention in an environment

driven by budget and policy decisions.

3. I consider the National Partnership for Reinventing Government

(NPR) the Clinton Administration’s quality management initiative.

Its stated goals are making government work better and cost less,

with an emphasis on customer service. However, NPR lacks

institutional leadership that transcends one person or one

administration. Given that, would it make more sense to locate an

initiative like NPR in an agency like OMB?

As your question suggests, management initiatives must have sustained

support from the political and career leadership to be successful. As long

as top leadership support exists, a variety of organizational arrangements

can be used to implement management reforms. Absent top leadership

support, a management initiative is unlikely to be sustained and

successful, regardless of where responsibility for leading the initiative is

housed. In response to our 1996 report on NPR’s Reinvention Labs,

administration officials noted that OMB’s historical role, its budget

responsibilities, and its statutory management responsibilities often

compete with exercising a role as a “change agent” seeking to foster
Enclosure

Responses to Subcommittee Questions Following July 29, 1999,

Quality Management Hearing 

Page 4 GAO/GGD-99-181R Answers to Hearing Questions on Quality Management

innovation.3 Historically, OMB has been reluctant to become heavily

involved in some management initiatives because of the small size of its

staff and its view that federal agencies themselves are responsible and

accountable for making management improvements.

In this context, we have found that effective collaboration with the

agencies—through such approaches as task forces and interagency

councils—has emerged as an important central leadership strategy in

developing policies that are sensitive to implementation concerns and the

need to secure consensus and consistent follow-through within the

executive branch. OMB’s work with interagency councils has been

successful in fostering communication across the executive branch,

building commitment to reform efforts, tapping talents that exist within

agencies, keeping management issues in the forefront, and initiating

important improvement projects.

4. Can you identify any other quality management programs that

were initiated by previous administrations? What became of them?

Prior to NPR, previous administrations undertook a series of related

quality management efforts. In February 1986, President Reagan issued an

Executive Order that formally established a governmentwide effort to

improve the productivity, quality, and timeliness of government products

and services. This effort was continued with OMB Circular A-132, which

until 1989 mandated a governmentwide TQM effort and provided

guidelines for the development and implementation of a productivity and

quality improvement process in the executive branch. An OMB official

recalled that agencies viewed the reporting requirements of this initiative

as too burdensome, and consequently emphasis on this particular TQM

program waned.

The Federal Quality Institute was also established in 1988 to serve as a

source of information, training, and consulting services for agencies

engaged in TQM. As noted earlier, in 1990 OMB’s governmentwide

leadership functions and resources devoted to TQM implementation were

consolidated into FQI. In 1995, Congress eliminated FQI’s funding, and its

responsibilities were shifted within OPM. The Federal Quality Consulting

Group, FQI’s successor, is a federal franchise activity within the Treasury

Department that offers federal agencies consulting and facilitation

services.

 

3

 Management Reform: Status of Agency Reinvention Lab Efforts (GAO/GGD-96-69, Mar. 20, 1996).
Enclosure

Responses to Subcommittee Questions Following July 29, 1999,

Quality Management Hearing 

Page 5 GAO/GGD-99-181R Answers to Hearing Questions on Quality Management

Additionally, the President’s Quality Award Program (PQA), begun in 1988,

has given awards to federal government organizations for (1) improving

their overall performance and capabilities and (2) demonstrating a

sustained trend in providing high-quality products and services that results

in the effective use of taxpayer dollars. OPM manages the program, and its

award criteria are closely aligned with the Malcom Baldrige National

Quality Award criteria used to recognize private sector organizations. The

PQA award criteria have evolved to become more results-oriented and

now include a distinct category for producing results in areas such as

customer focus and human resources. This adaptation reflects quality

management’s overall evolution from a focus primarily on quality and

employee issues to a broader, results-oriented focus. Since 1988, the PQA

program has recognized federal organizations 85 times, including most

recently 9 organizations last July.

5. How can the information in agency strategic plans, annual

performance plans, and performance reports be used to identify

and facilitate improvements in quality processes?

The information in agency strategic plans, annual performance plans, and

performance reports can be an important tool to identify and facilitate

improvements in quality processes. The connection between what

agencies do on a daily basis and the results that those activities are

intended to achieve are key elements of all three Results Act products.

The information in these documents can be crucial in identifying

performance gaps, targeting improvement opportunities, and tracking

progress.

6. How can agencies successfully integrate total quality

management and the Results Act to address some of the more longstanding management problems?

No serious effort to fundamentally improve the performance of federal

agencies can succeed without addressing long-standing management

challenges and program risks. The Results Act and quality management,

with their shared focus on using sound performance data to make

decisions, can provide an integrated approach to improving both the

overall results agencies seek to achieve and the processes that contribute

to those results. Measurable goals for resolving mission-critical

management problems are important to ensuring that the agencies have

the institutional capacity to achieve their more results-oriented

programmatic goals. Our assessment of the fiscal year 2000 annual
Enclosure

Responses to Subcommittee Questions Following July 29, 1999,

Quality Management Hearing 

Page 6 GAO/GGD-99-181R Answers to Hearing Questions on Quality Management

performance plans showed that agencies are not consistently addressing

management challenges and program risks in their plans.

Agencies that did address the challenges and risks in their plans used a

variety of approaches, including setting goals and performance measures

that were linked to the management challenges and program risks. These

agencies also discussed the strategies and processes that are to be used to

address the program risks. Using the annual performance plans to identify

strategies and processes for addressing management challenges and

program risks is a clear illustration of how quality management’s focus on

processes can be used to complement the Results Act in addressing

program risks. For example, the Department of Transportation’s (DOT)

lack of controls over its financial activities impairs its ability to manage

programs and exposes the department to potential waste, fraud,

mismanagement, and abuse. DOT’s performance plan identifies financial

accounting as a management challenge and addresses key weaknesses that

need to be resolved before DOT can obtain an unqualified audit opinion.

Importantly, DOT’s corporate management strategies include efforts to

receive an unqualified audit opinion, enhance the efficiency of the

accounting operation, and implement a pilot of the improved financial

systems environment.

7. How can Congress best use the information in agencies’

strategic plans, performance plans, and performance reports to

identify the degree to which agencies have quality management and

related initiatives in place?

In our recent report summarizing our reviews of agencies’ fiscal year 2000

annual performance plans, we noted that we have long advocated that

congressional committees of jurisdiction hold augmented oversight

hearings on each of the major agencies.4

 Information on missions, goals,

strategies, resources, and results could provide a consistent starting point

for each of these hearings. Such hearings also would further underscore

for agencies the importance that Congress places on creating highperforming executive organizations. Performance planning under the

Results Act should allow for more informed decisions about such issues as

• whether the agency is pursuing the right goals and making progress toward

achieving them;

• whether the federal government is effectively coordinating its responses to

pressing national needs;

 

4

 GAO/GGD/AIMD-99-215, July 20, 1999.
Enclosure

Responses to Subcommittee Questions Following July 29, 1999,

Quality Management Hearing 

Page 7 GAO/GGD-99-181R Answers to Hearing Questions on Quality Management

• whether the federal government is achieving an expected level of

performance for the budgetary and other resource commitments that have

been made;

• the degree to which the agency has the best mix of programs, initiatives,

and other strategies to achieve results;

• the progress the agency is making in addressing mission-critical

management challenges and program risks;

• the efforts under way to ensure that the agency’s human capital strategies

are linked to strategic and programmatic planning and accountability

mechanisms; and

• the status of the agency’s efforts to use information technology to achieve

results.

8. One of the keys to the success of Ohio’s Quality Services

through Partnership initiative was employee involvement. How

does the Results Act provide for employee involvement?

The Results Act does not have a specific requirement for employee

involvement, other than to identify the development of strategic and

annual performance plans and performance reports as inherently

governmental functions that must only be done by federal employees.

Nevertheless, the involvement of managers and employees throughout the

organization is important because if agencies are to implement and sustain

major management reforms, a cultural transformation must occur at

agencies that requires them to more effectively manage, develop, and

involve their most important asset–their human capital. This cultural

transformation requires employees to understand the importance of, and

the connection between, their individual performance and achieving

overall agency goals. Employees who are unsure about the direction their

agency is taking will not be able to effectively focus on achieving those

goals.

When we surveyed federal managers at the GS-13 level and above in late

1996 and early 1997, over half of the managers said that they had no

involvement in many of the activities related to their agency’s

implementation of the Results Act. However, members of the Senior

Executive Service (SES) reported higher levels of involvement in key

Results Act-related activities. For example, 72 percent of the SES

managers reported that they had been involved in establishing long-term

strategic goals for their agency. On the other hand, only 35 percent of nonSES managers reported being involved in establishing strategic goals. At

the request of the Subcommittee, we are conducting the survey again to

see whether the level of involvement has increased over the last 3 years.
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Page 10 GAO/GGD-99-181R Answers to Hearing Questions on Quality Management
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